The theory contains one giant flaw that spoils it. But it also references a few events that did actually happen at Google. That's why the "Google AdSense Leak" (as it came to be known) electrified Google's search marketing partners earlier this month — and why a few of them regard the theory as a fancifully embroidered version of a more mundane truth. They don't believe the theory is real, but they can see why some people might believe it.

... we’ve also heard the stories: publishers finding their accounts suspended or even disabled for “invalid activity” without a clear understanding of why or how to fix it. We know this can be an intensely frustrating, even scary experience.

The conspiracy theory.

Here's the background on the conspiracy theory: An alleged former Google employee claimed anonymously in two separate posts on the Pastebin site that the company systematically banned hundreds of Web publishers from its AdSense advertising system simply because they were making too much money. Any publisher that made $5,000 or more per month by running Google ads on its website was banned from the system right before its monthly check was paid, and the earnings were reversed back to Google, the leaker claims. This supposedly occurred several times through 2012. Ultimately, larger corporate publishers were left alone but small or one-person publishers got hurt the most, the theory says.

Google offered a speedy denial:

This description of our AdSense policy enforcement process is a complete fiction. The ... programs the author describes don’t exist. Our teams and automated systems work around the clock to stop bad actors and protect our publishers, advertisers and users.

Business Insider contacted three sources who have done business with Google in the past to get their opinions. We were expecting them to brush off the story like lint from a suit collar. To our surprise, they all said that while they did not believe the "leaker" was genuine, some parts of the story felt familiar. The sources were a search ad agency CEO, a search marketing consultant, and a successful web publisher who had been banned from Google's AdSense program but did not know why.

Google did in fact begin a big program of banning sites from using AdSense in 2012, an act that likely reduces its revenue and would do little to increase margins. The company wrote a blog post about it here. It did so to combat click fraud (when computer programs pretend to be people clicking on ads) and to weed out bad actors who were engaging in click fraud or otherwise unfairly gaming the system — for instance, by buying low quality traffic rather than earning readers organically.

One web publisher who got caught up in the purge told BI this:

We had a website running with Google “Adsense for Domains” that was doing really well in 2011/12. Nobody here did anything to try to drive the clicks up, and yet Google did exactly what the writer says — they threw us out of the program right before a decent payout was supposed to be made in April of 2012. That matches his [the leaker's] story precisely — here’s a screen shot of the lovely email they sent us:

The search ad agency chief agreed:

This is absolutely true. … they were banning AdSense partners to raise the quality of the network. … they were taking a short term hit to partner ad revenues from the display network in order to ensure the long term quality of the display ad network.

Google has over 2 million publishers in their display [network] and so they don’t manually investigate every one – rather, they lean on computer algorithms and automation. It’s the same in AdWords where you have millions of advertisers, and Google needs to shut down accounts that are abusing the system (eg: selling illegal products, or whatever) so they have these algos that shut down suspicious accounts, but they’re not 100% accurate. For example, my own AdWords account even got shut down once due to some weird glitch (even though we’re a Google Partner) and it also happens periodically to our various advertiser clients, even though they’re not violating any AdWords terms of services. It can be difficult to get a wrongly banned account to be re-instated.

The crucial point here is that the purge of sites from AdSense happened because Google was trying to clean out bad actors and increase the quality of web sites where its search ads were running. So yes, a massive amount of websites were suddenly banned in 2012 just as the conspiracy theory alleges — but the purge was intended to improve the quality of Google's offerings, not because Google needed the money. (As we've noted before, Google does not need money — it's currently adding revenue at a rate of 19% per quarter.)

One of the problems with the program, however, is that Google cannot explain to publishers why it believes a site has low quality or fake traffic without revealing how it detects click fraud. If it revealed how it detects fraud the fraudsters would change their tactics to compensate. So the bans feel mysterious to those who are affected by them. Publishers are often baffled because they may not know that their site is being used as a source or pivot point for fake clicks. (Here's an explanation of just how complicated the fake click ecosystem can get.)

Finally, Google does indeed have two tiers of publishers, as the leaker claims. Bigger advertisers get Google ad sales staff to manage their accounts. Smaller publishers just get the AdSense interface. Google has been doing this a long time, as this old web page shows. Some people believe having a "premium" or managed Google account lets publishers skirt the rules.

Of course, Google's enemies are loving all of this speculation. Microsoft, TripAdvisor, Expedia, and Oracle are among the companies that believe Google discriminates in favor of its own search results and against their offerings. They have funded FairSearch, an organization devoted to needling Google over its practices. In a blog, post the group said:

These recent allegations are another sign that Google’s thirst for profits comes at the expense of meeting its legal obligations and commitments to business partners it says benefit from its own dominance. In the past few years, the company settled for $500 million with the Department of Justice for assisting in the illegal sale of prescription drugs online, and several state Attorneys General have voiced concern over Google’s revenue from ads placed with YouTube videos that depict or promote illegal and other activities harmful to consumers and even children.

The search consultant told us that he would actually welcome some sort of legal inquiry into the theory:

In order for the truth to come out a formal inquiry by an independent body SHOULD be held, and Google should produce clear reasons for shutting down accounts and prove that the money that they held was rebated to advertisers not kept / retained.

(Google's official policy is actually to return all money to advertisers when sites are banned for infringments.)

This is all gossip, of course. But it's important gossip, because Google cares deeply about its corporate reputation. Here's the only thing we know for sure right now. Everyone agrees the theory is fake and the leaker is not a real Google employee — he or she got key details wrong, apparently. The smart money says this is a website publisher who got banned and is now seeking revenge. But the leak got enough right to get a conversation going.

Here's why the theory is wrong.

More importantly, the theory must be wrong because, by definition, the more publishers and fake clicks that get axed from the system, the fewer ads Google serves, and the fewer paid clicks it generates. Its revenues would decline in the process. And as Google takes a fixed cut of AdSense revenues, it wouldn't affect the profit margin percentage anyway.

For the record, here's Google's denial in full:

This description of our AdSense policy enforcement process is a complete fiction. The color-coding and “extreme quality control” programs the author describes don’t exist. Our teams and automated systems work around the clock to stop bad actors and protect our publishers, advertisers and users.

All publishers that sign up for AdSense agree to the Terms and Conditions of the service and a set of policies designed to ensure the quality of the network for users, advertisers and other publishers. When we discover violations of these policies, we take quick action, which in some cases includes disabling the publisher’s account and refunding affected advertisers.